A much-needed breather: Annual General Meeting via video-conference/other audio visual means during calendar

year 2020

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 Relaxation granted to convene Annual General Meeting (“AGM / Meeting”) via video-conference (“VC”) / other audio visual means

(“OAVM”) during the calendar year 2020, to all the companies including those whose financial year ended on March 31, 2020.

 In view of several representations and simultaneous restrictions of movement of persons at several places under Covid-19, Ministry of

VC or any OAVM mode via General Circular No. 20/2020.

The MCA keeping in mind the exigencies, subsequent extended nationwide lockdowns and difficulties involved in physical

meetings, has recognized the need of providing relaxation from the requirement of convening in person AGM for the calendar

year 2020.

The clarification has been issued with the primary objective of ensuring smooth adherence of Companies Act, 2013 (“the

Act”) provisions amidst the pandemic lockdown for convening the AGMs which is the one of the few opportunities

shareholders have to question the board, engage directly with management, and hear the views of other shareholders.

provisions of Companies Act, 2013 or rules made to allow companies to hold AGM in a manner similar to the one provided in

General Circular No. 14/2020 and 17/2020 (“EGM circular I and II”) which deals with the conduct of Extraordinary General

Meetings (“EGM”) through VCs.

General Circular No. 18/2020 illuminates that the companies whose financial year ended on December 31, 2019 can hold their

AGM via VC / OAVM by extended timeline of September 30, 2020; and by virtue of this circular, the matter has been further

examined to allow the companies whose financial year ended on March 31, 2019 or companies following different financial

year (viz. July to June) with approval of The National Company Law Tribunal, to hold their AGM on or before September 30,

2020 by additional means of VC/OAVM.

Act, or any other company which has opted for such facility such companies (Category 1) –

i. Compliance with manner and mode of issuing notices as provided in EGM circular I and II for companies falling under

ii. Curbing consideration of items of special business, to the extent of unavoidable in nature;

iii. Owing to practical difficulties involved in dispatch of financial statements (including Board’s report, Auditor’s report or

other documents required to be attached therewith), the same shall be sent by email to all the entitled persons;

iv. Publication of notice and copies of financial statement in such newspaper as prescribed in the circular along with the

framework specified therein;

v. On lifting of restrictions, dividend warrant / cheque to be dispatched by post to those shareholders to whom dividend is

unpaid due to non-availability of bank details under electronic mode;

vi. In case where, permission is obtained from any authority to convene physical meeting of AGM at registered office or

other place; a provision of attending AGM through VC/OAVM mode shall be provided to other members to participate

at the meeting through e-voting facility and such members attending meeting in person and via VC/OAM shall be

reckoned for the purpose of quorum of the meeting.

addresses of at least half of its total number of members. Reference for computation of number of members should be

made to the circular;

ii. The company shall take all necessary steps to register the email addresses of all persons who have not registered their

email addresses with the company;

iii. Companies to make provision to allow the members to provide their mandate for receiving dividend directly in their

bank account through Electronic Clearance Service and dispatch dividend warrant / cheque to those shareholders to

whom dividend is unpaid due to non-availability of bank details under electronic mode;

iv. Adherence to compliances mentioned under point (i), (ii) and (iii) of category 1.

The circular further clarifies that other compliances associated with the provisions relating to general meetings viz making

of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc.

GUIDANCE BY MCA

with the framework provided in this Circular are advised to prefer applications for extension of AGM at a suitable point of time

before the concerned Registrar of Companies under section 96 of the Act.

granted extention (up to September 30, 2020) under General Circular No. 18/2020 are restrained to apply for extention under

section 96 of the Act.

TAKEAWAYS

Considering the current situation, it will be prudent for the Indian companies to understand and test the requirements

beforehand for conducting AGMs through VCs to ensure that they run smoothly to ensure validity of the meeting and that intent

of law and shareholders’ interests both are served well.

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